'Labour's electric fantasies' – I just love the title
The Times, Friday, 14th November 2008
Talking Point
Labour’s electric fantasies
Austin Gatt
Joseph Muscat spent most of his time on Monday in Parliament trying to look like he understood how oil is purchased, electricity is generated and the cost is recovered from consumers. He looked solemn and grave until the other shoe dropped.
He pronounced his advice to the government that all electricity and water meters should be read in one go before new tariffs were introduced. Last one who tried it was Alfred Sant in 1997 and look at the mess they made.
And all this because the arithmetic is too obscure for Dr Muscat to understand estimating consumption and correcting it against periodical readings as we had done every time the surcharge was revised without the errors Labour was faced with in 1997.
Now with such a poor understanding of the principles of math, no wonder he got so much else wrong. Dr Muscat: If the surcharge were to be applied to the new tariffs we’d be paying a 194 per cent surcharge. Myth. It actually works out at around 125 to 135 per cent and if he forgot his multiplication tables he should have figured out that if a 160 per cent surcharge (due this October) would have collected €253 million to recover oil costs, our revised forecast of €223 million will collect less.
Then he used a typical Sant theatrical spin. He read out a “letter” supposedly from an old-aged couple, worried that the annual cost of renting a three-phase supply for the lift had more than doubled to €900! Obscene, he said! It would be … if it were true; but since the real rent charge is €195 per year, it is fairer to say that obscene applies elsewhere.
Fantasy? Considering that all the numbers are public and are contained in the presentations given to MCESD members, to the press and even to the Labour Party when they came to my office in the persons of Charles Mangion and Marlene Pullicino, I have to start wondering whether it’s only fantasy. Dr Muscat was also invited but he was otherwise occupied!
He even said that the tariffs had to be high because Enemalta had bought oil in advance at a high price. Complete fantasy. Enemalta buys oil on a monthly basis at the price of that month!
He immediately ran head on into another gaffe. He said that we should buy more oil now so that when we mix it with the one which we were supposed to have bought we could lower the tariffs! Incredibly he confused “buying oil in advance” with “hedging” (which is not about buying oil) and was merely repeating the method that Enemalta has actually been using for years; buying oil at the current market price and balancing it with forward hedges.
Then he said that we had not given him the oil price per ton Enemalta had based its calculations on! All he needed to do was flip through the presentations given to his people.
Plain silly? Dr Muscat suggested we should use the reverse osmosis plants more at night and there should be cheaper rates for industry at night. Done that for donkey’s years!
Dr Muscat suggests we put in a new system that allows consumers to read their consumption online. Tok, Tok, anyone up there? Didn’t he read that last month Enemalta signed a €44 million contract to do just that among many other things!
Still not satisfied he left his best one for the end.
You should be ashamed of yourself, he ranted. Gordon Brown has been pressing to have petrol and diesel reduced immediately and you lot just sit there doing nothing! Shame, shame chorused his people. Fact: On October 20, 2008, a litre of diesel in the UK was €0.27 costlier than in Malta and petrol €0.13 costlier!
We have had stable prices since last June (diesel €1.20 and petrol €1.19) and at that time the UK was €0.30 costlier on diesel and €0.46 costlier on petrol. So who has the best policy; us, Gordon or Joseph?
Mickey Mouse facts may have sailed through in a 600-plus seat Parliament with three-minute speeches – they get noticed in our cosy Parliament and speaking for two hours has never been a good idea except for seasoned politicians.
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Bloody hell, this article’s a masterpiece.
http://www.timesofmalta.com/articles/view/20081114/local/inflation-up-steeply-in-october
I LOVE the last paragraph!
Austin’s arrogance never fails to amaze me….reminds me a lot of times gone by….
[Daphne – He was elected by the people to represent the people, which is more than can be said for the leader of the Labour Party. Arrogance is assuming that position without a popular mandate.]
“so the real prime minister has finally stood up… but I don’t believe him because Joseph said….”
Just trying to preempt the usual drivel that infests the online Times comments section.
How come they haven’t sent for Austin in the UK or the US to solve their problems? He always seems to get it right.
When you compare, compare like with like. With today’s current PLATTs prices, petrol should be around 0.90c a gallon and diesel about 85c a gallon. This childish and populist comparison with UK prices doesn’t hold water as everyone knows average wages in the UK are three times higher than in Malta.
@ D Fenech. There is a ‘flaw’ in the way the basket which makes up the RPI is composed so in reality the inflation rate should be much more than that.
http://www.nso.gov.mt/statdoc/document_file.aspx?id=2326
page 51 of the document will establish what i am stating.
Base year is taken as 2002. The Fuel, Light & Power component has risen by 46.58% since then which has been by far the component which had the steepest increase. However when the whole basket is calculated, this component only has a 2.25% weighting!!! So in reality the basket is unfortunately not reflecting today’s world!
Gerald – what has petrol and diesel prices got to do with local wages. As if the OPEC countries and the refineries sell fuel according to the prevailing wages in the country.
Gerald – Our wages maybe lower than in the UK …but the distances we travel are much less – our island is 19 miles x 7 miles…so our expenses to commute are much lower than
someone living in the UK.
[Daphne – We don’t pay for central heating, either.]
What is this, a Christmas present?
http://www.timesofmalta.com/articles/view/20081114/local/dalli-calls-for-discussion-on-health-insurance
What an amazing article! Just shows the level of incompetence present in the opposition party. One would assume that they would at least research their stuff before speaking. Then again why am I not surprised.
D Fenech: It is particularly good news for people who need expensive life saving drugs or drugs to cope with chronic illness, which are not available through the public health service.
John: Maybe it was a misprint.
Gerald
the UK has so many hidden taxes you probably end up with more money in your pocket than someone with a similar position in the UK. Council Tax average of around €1300 a year. How much do you pay for parking in a typical week? When I was in the UK, I could easily pay another £1500 just for trains to get to work in a year. You couldn’t go out for a drink with less than £100 in your pocket, and I’m not talking about going out to get pissed, just a few rounds!
Gerald
“When you compare, compare like with like. . . . . This childish and populist comparison with UK prices doesn’t hold water . . . .”
I believe the comaparison with the UK was first made by Joseph Muscat. Austin Gatt was simply replying to JM’s arguments.
Gerald: common sense dictates that if you must compare wages across countries, you have to compare “real” rather than “nominal” wages. It is also useful to compare what percentage of a household’s income is spent on transport, utilities, groceries, property taxes, local taxes, etc…
Marku: “Gerald: common sense dictates that … It is also useful to compare what percentage of a household’s income is spent on transport, utilities, groceries, property taxes, local taxes, etc…”
All of which has nothing to do with the price of eggs. Gerald expects the real price of utilities to fluctuate according to wages.
sinjura xi darba nixtieq nisma l veduti tighek fuq IL BARUNIJIET TA DROGA ftit ili nsegwi dal blogg u qatt ma naf li ktibt xi haga fuqu . u nixtieqek ukol tghid xi haga fuq dawk li JIDDEFENDUHOM
It really amazes me how some people complain about the lack of action by the Government in some areas (and they aren’t really that wrong…) yet criticise Austin Gatt for actually doing things!
OK, so Austin may not be the most tactful of persons, but what the heck, he ACTS not only talks ad nauseam.
In my opinion, we need plenty more Austins in our Parliament.
This links lead to the utility bill calculator on the water services website.
http://www.wsc.com.mt/(S(sa4edl45rkmk3jex3dabrm55))/default.aspx?MLEV=22&MDIS=104
Take the actual reading from the meters then subtract the reading from the slip the meter reader left on his last visit (to obtain the amount of units used just in case someone in par__ment got perplexed about the subtraction) this will give you a good idea of the next actual bill including surcharge.
It is all very true what Steve said about the UK, but relatively it is still cheaper to live in the UK then in Malta. Just a few examples:
1. Health Service is 100% free including medicine(if you work you pay £6.85 (E8.00) for a prescribtion)
2. A pint is about £3.00 -E3.80 (this varies from town to town)
3. Petrol / Diesel £1.00 – E1.22 per litre (UK)/ E1.09 (ROI)
4. Taxi fare £1.00 per mile (N. Ireland)
5. Electricity: E0.1567 per unit + E20.50 meter rental for 61days – NO EXTRA DUTY / LEVY / SURCHARGE (ROI)
and so on
You might still think these prices are ridiculously high but don’t forget that the minimum pay for an adult over the age of 22yrs is £5.73/hr (E7.16), while in ROI is E8.65/hr and in Malta E3.14/hr(please correct me if I’m wrong). I will let you work out the percentages.
It is true that most people here finish without a penny at the end of the week, but then it’s a question of lifstyle, if you earn £13000(E18,000)/year you just survive…. in other cases £65000 (E80,000)is barely sufficient, the more you earn, the more you spend. Yet I don’t expect any government or anyone else to take money out of my pocket just because!
So, I do agree with people protesting in any way against price hikes, especially now that the price of fuel is so low, why did the price of electricity go up?
Look at it from any perspective at it simply does not make sense!!!
Oh! I just missed this:
Daphne – We don’t pay for central heating, either.
But you pay for WATER which in ROI and most of the UK is FREE
Still percentage wise it’s cheaper to pay for oil in Uk, then water in Malta. Work that out!
[Daphne – Really, you don’t pay for your heating? How does that work out? And why were the British newspapers full of stories about people unable to heat their homes last winter?]
I’m not saying that our costs are more expensive than the UK as it is true that there are a lot of hidden taxes, central heating, long distances to travel etc.
However, what I’m trying to say is that with current PLATTS prices – we should be paying way less than what we are currently paying now at the pumps and that’s according to previous prices as they used to be worked out by Enemalta. To add insult to injury, the budget included further tax increases on every litre of petrol and diesel to fund another of its pie in the sky projects – a wind farm which I’ll believe when I see it.
And as for the AG/JM exchange, the Minister and the PM regularly shout out that our prices are cheaper than the UK for populist propaganda purposes so JM is more than right to bring up the comparison.
Corinne, I did not say that and you very well know it! but you cannot have fuel prices which are unreasonably high and taxed to death when you expect to remain competitive in an economy which is suffering globally. After all, if ful prices go down to the levels they are on the market then consumption will increase and the govt will earn more taxes anyway.
All this argument hinges on the stark fact that the govt made the wrong decisions when purchasing oil stock at what was then a very high price (June/July) and freezing the pump price for six months. It left its way with no room for manouevre. And I’m not saying that Labour would have solved the problem either, I’m just stating facts and you know that I’m right.
Gerald: “comparison with UK prices doesn’t hold water as everyone knows average wages in the UK are three times higher than in Malta.”
It’s not what you meant, but it’s what you said.
Christian: “But you pay for WATER which in ROI and most of the UK is FREE”
That may have something to do with the weather in the UK and ROI.
[Daphne – People forget that water in made is made not gathered, and this requires power.]
@ Christian – quality of life comes into this too.
In Malta if someone needs a doctor he rings or goes to his
G.P. that day (if it’s something serious – within the hour)
In England he’d wait days for an appointment, then has 15
minutes allocated to him and can only discuss one ailment.
In Malta, if your pipe bursts or your lights go out you
ring your plumber who comes straight away (mine does)
doesn’t charge you a call-out charge whatever time or
day it is. Try getting a plumber at the weekend in the U.K.
It could bankrupt you.
My daughter in England pays water, gas and electricity
by standing order every month.
@ Christian – we have to resort to reverse osmosis for around 60 – 70% of the water we use. The process requires a hell of a lot of electrical power. Regarding your statement that living in the UK is cheaper – absolute bollocks! Try living there on a ‘normal’ wage and compare the quality of life that you’d get there as opposed to here. As to the ‘Health Services’ in the UK – don’t even touch that subject. BTW ours are free too.
And where do you buy your pints from in Malta? Paceville or the typical village bar? If you’re talking about the former, the UK prices in clubs are significantly higher than ours. Compare PV prices to ones in London not towns. Taxis aren’t used here… guess why? Two out of every three people drive cars. Public busses are (or should be) used by locals… compare those prices! And while we’re at it… compare a student’s life here to a student’s in the UK!
@ Gerald: “a wind farm which I’ll believe when I see it.” … you’d believe it only if JM says it exists.
One of the few sensible things Sant did in his first budget was to remove the oil/electricity subsidies. Now the opposition is reacting in exactly the same way that the (other) opposition party did then – I’m not looking forward to my next bill but do you honestly think that prices will change when/if the MLP wins the next election?
Strange how the GWU conducted a long study of Sant’s new water & electricity prices but never reached any conclusion. That shows their real motive. Social conscience my ass!
You right Amrio that what we need in this country persons like Dr.Austin Gatt in Parlament.
And journalist like the owner of this blog.
Cikki is right about plumbers in the UK. It’s not just plumbers (and it’s not just the UK) What people in Malta tend to do is look at the job listings, find a job similar to their own, and go “Wow, I could be 3 times as well off as I am here.” Well there’s a reason that someone is paid three times what you are paid. Things are expensive! Ok, I’m not talking cars or holidays. It’s the small things that just add up.
@ Daphne – Sorry, that was your own sentence from earlier on, not my statement. And by the way, no in one of the house I do not pay (or pay very little for heating as it is Geothermal heating.
@cikki – I can assure you that in the UK, you just phone your doctor (or actually the practice – just in case your doctor is off) and yo visit the same on the same day. After hours you’ll have to visit the ‘doctor on call’. If you’re sick enough and can’t travel the doctor will be sent out to you. It is for very minor consultations or repeated check-ups that you have to make an appointment, and usually seen within 5 working days.
OK then let’s compare pint prices like for like. In our night club(a four star hotel night club) in the middle of a raving city ( about the size of Malta ) the local pint is £3.00 and in the pub is £2.90. In what you call a local pub a pint is still about £2.50. In London I presume you pay a bit more, about £4.00. Now that’s compared to the minimum wage, which is £5.73, £3.00 is only half an hour work. Malta’s pints need to sell at E1.57 to be at the same level. The last time I was there I paid E2.20 for a pint in a local, which I believe is average.
Guess why taxis are use here more than public transport for local runs!! THERE WAY TOO CHEAP TO BE BOTHERED WITH THE BUS. I’ll give you an example of a local run. A taxi costs you £2.50 for a local run of up to 3miles, then it’s £1.00 per mile. That’s if you want to go to work, you pay again less than half an hour work each way, if you’re on minimum wage. The bus is £1.00 and people aren’t bothered, barr long distance travellers. I drive my own car, and sometime I envy people living in the town/city!! They take taxis to go grocery shopping….. that’s what I call lifestyle. This includes people on benefits!!
Student life!! I didn’t have much of a student life in Malta as I had to work to live a normal life, and only went back to university here. Students here simply study for free, just like in Malta, once they’re not in full time employment. Now most of them decide to go to a university which is miles away from home. They are entitled to ‘student loans’ which are about alf the national minimum wage, and are only payable back once they are in employment earning over £35,000 which is about three times to minimum pay. By the way, the interest rate is the base rate, which is about 3%. This loan pays for their accomodation, utilities, groceries and even leaves them with some spare cash for the weekend. Alternatively one can go to the local college for free, and that’s the same as in Malta, you live with your parents etc.
Need any more info, please don’t hesitate to ask:))
BTW, I am not saying life abroad is all roses. Far from it… please read my other posts on ‘Malta- 82 places behind Norway’. But definitely there’s a lot of room for improvment to be made in our beloved country. Why not learn from other people shortcoming to improve ourselves. but then if you are happy to pay, or comfortable enough to do so….good luck
@ Christian: Need any more info, please don’t hesitate to ask
No need to… my family’s British.. but they seem to live in a different Britain – perhaps a more real one. Re students life – wow! dunno which uni you went to but the students in my dorm sure as hell had no ‘extra money’ .. not just for weekends but for daily items – you know, things like food and stuff? In fact many of them had to work which is something you’d never ‘dare’ mention in Malta. By the way, many chose to work to avoid the loan. But since we’re into comparing… compare that with what the students here are used to. Again, its not a matter of being happy when having to pay bills… its a matter of facing reality which, by the way, was also an issue that the MLP had to face 10-odd years ago… and I didn’t see any manifestations then. My point is that this really has nothing to do with government policy. The majority voted to join the EU knowing that subsidies had to be phased out.
I agree there is room for improvement – we don’t only have to look at the North to see that many countries have taken initiatives to invest in oil-free/clean energy – and I’m not talking about doing things on a national scale (such as the wind farms Gerald doesn’t believe in). One reason why we haven’t done much about looking into other energy sources is because we’ve had it good for a long time. Why invest in Solar heating when things are subsidised by papa-governments? And don’t tell me that many cannot afford to inverst in alternative energy (although I’m sure that many can’t, my point is that many can). Time has come to invest in order to save.
And I’ll get hit too with these new prices so don’t assume that I’m pontificating (I am, I know) because an extra hundred Euro or two (or three?) a year won’t affect me. It will.
Its a matter of getting priorities right – reality is kicking us in the arse and we’re trying to ignore it.
NGT:
I was one on the front line when the MLP decided to cut the students’ stipends. Because I couldn’t survive with simply working a few hours in the evenings I had to give up studying.
I actually pay my for my studies here and it’s quite expensive as I work full time and have quite a good pay. But I see students here and their lifestyle, nothing compared to the lifestyle we had about ten years ago when I was still at college in Malta.
I personally invested in some clean energy supply equipment and it works! I take it if it works on a smaller scale, it should work on a larger one. So, yes, if Malta can afford it, it will pay for itself!
Yes, unfortunatey it is time to ‘inrossu ic-cintorin’ again. As I said before history is only repeating itself worldwide, Malta has to follow.
I am just hoping that next time, when things are better again we will try to ‘make hay when the sun shines’, and not simply go the the beach as we did in the past years.
I was about to reply to Christian re student life and NTG
did it for me. Also I believe the figure for paying back
student loans is £14,000, certainly not £35,000.
What about council tax, television licence,etc……..
Cikki: I don’t know if things have changed, but I didn’t have to pay council tax when I was a student in London.
@Cikki:
It is definitly £35000, cause my partner pays it. It went up two years ago from £24000 to £35000. As in coucil tax it depends on the property value, there’s a formula to it. I do not pay council tax as my properties are in the ROI, but then I pay E96.36 a month for bin collection.
@ Corinne Vella:
That’s because maybe you rented the property, therefore the owner would pay the council tax and included it in your rent.
In reply to an earlier posting re plumbers if you call Joe the plumber from down the road like you do in Malta, he would be quite reasonable. The plumbers and sparkies I use cost me about E14.00 an hour, no call out fee. If you want a professor to fix your dishwasher or shower, then you pay a call out fee of about E120.00, depending on the company.
@NGT: ‘No need to… my family’s British.. but they seem to live in a different Britain – perhaps a more real one.’
Maybe, you just need updating. I don’t live in Britain, just work in it, and simply get the best of both worlds. My parents-in-law, who I visited almost every day, live in the UK (Northern Ireland), so believe me, I get updates of any extra charges or benefits quite often.
Not all Maltese Students get a stipend or free University. If you happen to want to follow a course that MCAST or University do not provide, then you have to pay for the course and you neither get a stipend nor a smart card.
At NGT, – taxis aren’t used here… guess why? Two out of every three people drive cars. Public busses are (or should be) used by locals – Do you know why many people (including myself) own a car in Malta? It’s because Public transport finishes at 9.00pm in certain villages. Just imagine visiting friends and having to leave at 8.00 (especially if you need to get two busses for home. Cars are a necessity in Malta, because Public transport is no good.
[Daphne – Grace, your first paragraph is off the wall. You don’t get a stipend because you’re a student; you get a stipend because you’re at the University of Malta or MCAST, and a few other state-sponsored establishments, or any sixth form college. Oh and Grace, I thought you didn’t want to pay for ‘Austin’s JAQUAR’, so why do you now seem to want to pay for other people’s children’s stipends when they take courses not available at the university or MCAST?]
Corinne – sorry, I moved to wage earners without making it
clear.
“At NGT, – taxis aren’t used here… guess why? Two out of every three people drive cars. Public busses are (or should be) used by locals – Do you know why many people (including myself) own a car in Malta? It’s because Public transport finishes at 9.00pm in certain villages.”
This is what I can’t understand. When I studied I never had a car. There was no way I could afford it. Public transport in Sweden definitely holds a higher standard, but it is not even near as frequent as it is here, unless you live in a larger city. How come Swedes can get around fine without cars when they study and Maltese can’t?
Admittedly, my largest complaint to the government in this regard is the complete lack of bicycle lanes. I got around to everywhere using my bicycle, trains and what we in Sweden call my apostle horses (legs). Since moving here I have been constantly tempted to invest in a bicycle, but I honestly don’t feel safe. There are certain roads you could get around on, but most areas are a nightmare. A proper network of bicycle lanes would solve a lot of problems.
@ Christian – my daughter is paying a student loan back
and she earns somewhere between £20,000 and £25000, that
I’m sure of.
Re council tax, obviously one pays according to the value
of one’s property be it owned or rented. Usually one
owns or rents what one can afford so the amount paid in
council tax is relevant. Also as far as I know students
are exempt from council tax so its not added to their
rent.
As for plumbers, no one is talking about “professors” its
aknown fact that plumberd, gardeners, cleaners, etc.
cost a hell of alot more in the U.K. even taking the
difference in wages into account.
I’ll stop here – its getting rather tedious.
@ Daphne… hang on! why should I(we) have to pay for other people’s children’s stipends even if they DO take courses available at uni or MCAST? This is yet something else that is being taken so much for granted – its become a right not a benefit.
@ Grace.. well if the only reason for owning a car is to visit friends after 8pm, you really must be struggling to make ends meet.
@Grace and DCG
You are wrong. ALL Maltese students are entitled to a stipend, even those studying abroad.
http://www.timesofmalta.com/articles/view/20080822/opinion/are-maltese-students-resident-in-malta-who-opt-to-study-at-other-eu-universities-entitled-to-a-stipe
You see I am paying for other people’s stipends and supporting two sons who are following a private course. What really irks me is I get no tax rebate for paying fully for my sons’ education. Neither do I get a tax rebate for paying a health insurance, so as to use Mater Dei as little as possible.
Grace:
I’m not sure if I’m overly socialistic about it, but I do feel that a country need to support it’s citizens with several basic things and two of the top items is a good basic education and good basic healthcare. Should there be the need of some citizens to aim for higher/bette education and healthcare that’s a choice they can make, but they are still responsible to ensure the country’s basic standards are met. Same goes for other services such as fire department, police department, courthouse etc. You may never in your life need a fire put out, but that doesn’t mean your taxes won’t be used for it.
@ Antimony Students studying abroad do get a stipend, although they don’t get an allowance like Gozitan Students do. As you well know Gozitan students get an allowance for living away from home – and rightly so. I would have expected students studying abroad should be treated likewise. Students who are reading for a Degree or following a diploma course in a private collage in Malta are not entiled to a stipend and have to pay for everything from their own (or their parents’) pocket, although some get their part of money back, if and when they successfully finish their studies, through My Potential.
@ Pat I am not complaining because I pay taxes to support education and health, I am merely stating that not all students are equal, and I should get a tax rebate for supporting two young men through their studies – Since my sons are not getting any stipend from the government like other students. I wouldn’t mind getting a tax rebate for the money I pay for my health insurance, since this is saving the government quite a lot of money, when I attend private clinics/hospitals instead of Public ones.
[Daphne – I don’t know any Maltese students studying somewhere other than Malta who get a stipend from the Maltese government, unless they are on a temporary exchange but are registered at a Maltese educational institute.]
Austin has some nerve talking to us about energy tariffs. In any case, instead of announcing grand schemes allowing people to check their utility bills online, and attempting to make us feel so lucky to be Maltese by stating that Maltese utility rates are lower than the UK (takes a ‘seasoned politician’ to know that), Austin should put his money where his mouth is and explain why Malta is one of the least alternative-energy friendly countries in the world; why Enemalta makes millions of ‘avoidable’ losses per year, and why half of WSC water is unaccounted for.
He should have quite a blast defending himself. He’s been hedging his options all his life (multiple puns intended).
Lest you call me a labour elf, I’d be making fun of labour too, if only they’d been in government a tenth of what the PN have racked up.
Back to reading up on what our ‘seasoned politicians’ will be up to next.
Robert Zammit:
You did in a way answer your first question. Perhaps our rates are so low due to the fact that the Maltese government haven’t invested in alternative energy.
…or corollary, they haven’t invested in alternative energy to keep the costs low.